Early Retirement: “If You Fail to Plan, then You Plan to Fail”
“”By failing to prepare, you are preparing to fail.”- Benjamin Franklin
Let’s Talk Cash
Although I haven’t focused a whole lot on money to this point, I do see personal finance as one of this blog’s cornerstones. I think that money plays such an important role in our lives, that it is not enough to simply say, “you should save,” but rather, we need to adjust our entire life philosophy before we can really tackle some of the challenges people face when it comes to money. Hence why I’ve spent so much time harping on Stoicism and other seemingly unrelated topics. Now that much of the foundation has been laid, we can start building on that.
My personal goal, and my hope for all of my friends, family, and readers is to reach financial independence as quickly as possible. The common responses I get when I share this goal with people range from complete ignorance of what I’m talking about to skepticism and downright hostility. Either people have not considered the fact that they do not have to work into their sixties (or beyond) or they do not think that it is possible for anyone to achieve the level of wealth necessary to avoid that, without hitting the lottery or experiencing some other unlikely windfall.
To those people I generally say “well, I’ve seen it done,” and point them toward Jacob at earlyretirementextreme.com, or to Mr. MM over at MrMoneyMustache.com. That is generally the last I hear from them about the subject because many of them are not willing to admit that the hyper-consumerist way of life they have chosen is insane. Just recently though, I was having the conversation with a close friend and coworker, and he informed me that he thinks he “might just retire so I can spend more time flying my air plane and playing with my boat.” That got my attention!
Let’s Meet the Example
I’ll call this friend Lenny, (I’d hate to have him pissed at me for giving out his identity along with his life story). Lenny is a lot older than I want to be when I attain financial independence, but he is still younger than the normal retirement age (and has likely been financially independent for quite some time but chose to continue working). He is also an outlier by most standards. Without getting into too many specifics I will just say that he holds an AARP card (meaning he is over 50) and still jumps out of air planes on a regular basis, can outrun and out-lift guys half his age, and still has a full head of hair. That doesn’t happen on accident.
How Does He Do it?
Discipline. That is the one word that much of his success rests on. Lenny spent a lifetime taking care of his body, following a strict exercise regimen and eating right. He also never quit. He is the epitome of what it means to be unstoppable. Lenny has experienced hardships and setbacks like everyone else, some that would devastate a person, but the difference is that he didn’t let it alter his course. He kept his focus on what would get him where he wanted to be, his control over his own actions.
Lenny made sacrifices with his time money when he was younger to ensure he had an income for the rest of his life. He quite likely could have been absolutely retired in his early forties, but he has spent the rest of that time doing various jobs that he enjoyed and felt passionate about. That is what financial independence is all about. Contrary to what the nay-Sayers think, it is not about being lazy and “not contributing to society.” It is about removing the need to make money from the equation so that your decisions are driven by your purpose and values. How many of us work jobs we don’t care about or that even in some cases run counter to our values, simply to “pay the mortgage?” Imagine if you didn’t have to. Lenny doesn’t have to imagine, he lives it.
I’ve got another very close friend who’s story isn’t quite as sunny as Lenny’s. Let’s call this friend Tim. Tim was always an entrepreneur and was generally pretty successful in his pursuits. Some people would say, “Tim could step in shit and he’d find gold.” This used to be true, in fact, Tim has quite likely made considerably more money in his lifetime than Lenny has, yet he has very little to show for it. Instead of saving and investing during his high-income years, he spent every dollar he made, and then some. Tim got caught up in the “keeping up with the Jones'” trap and constantly compared himself to his friends rather than being happy with what he had, (which was considerably too much stuff). He spent, not only in an attempt to satisfy his insatiable desires, but also to achieve recognition for how successful he was. Basing decisions off of either of those factors is never a good idea.
His health also started out as good or better than Lenny’s, but he squandered that too. When Lenny was getting up early in the morning to go for a run and hit the gym, Tim was sleeping off a hangover from a night of debauchery. Over the years, that lifestyle will take it’s toll, and the effects are not only felt by the body, they are also felt by your bank account and your loved ones.
Within the same year, Tim went through a quadruple by-pass surgery, a divorce, and a negative year with his business. Two years, several maxed out credit lines, and a host of ruined friendships later, Tim woke up crashing on people’s couches and working a menial job for a paltry sum of money. Between his medical bills and loss of revenue, Tim was never able to get back on solid footing. It occurs to me though, that had he simply made a few different decisions early on, he could have retired many years earlier and his biggest concern now would be where to go fishing. Instead, he now tries to figure out how to stretch his $1,200 or so of monthly disability income to the next payday.
I Want to Live Like Lenny!
You may have noticed that I mentioned that Lenny owns a a freaking air plane! That kind of expenditure is not indicative of a miserly cheapskate who never spent a dime and lived off of Ramen noodles to save up enough to not work. Is it? A lot of people’s view of early retirement or financial independence is that it takes too much sacrifice, but I have to disagree. My household is on track to achieve financial independence decades before the average retirement age, and we really don’t do without. Mr. Money Mustache was financially independent in his early thirties and he’s living large. The fact seems to be that if you make it a priority in your life, and you take the steps that are required to get there, the destination is almost inevitable.
The primary difference between someone who ends up with what they want out of life, and someone who ends up without, is that one person puts together a plan and works the plan while the other person wings it and relies on luck. I don’t want to squander my time waiting around for the winds of fortune, I’d rather choose a direction and start paddling.
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